To The Moon

Taiwan Semiconductor Manufacturing (TSM.US) announced on Tuesday that its combined revenue for January and February rose to NT$718.9 billion (US$22.6 billion). Analysts had on average projected a 33% increase for the first quarter. February revenue grew by 22%, with the Lunar New Year holiday—which fell in January this year—affecting the growth rate. Revenue for the first two months of the year increased by 30%, driven largely by robust artificial intelligence infrastructure development ahead of the outbreak of conflict in the Middle East. As the primary chip supplier for NVIDIA, AMD, and Broadcom, TSMC serves as a barometer for the global AI industry. Attention is now focused on how potential U.S. and Israeli strikes against Iran could affect the willingness to build data centers and other digital infrastructure. Alphabet, Amazon, Meta Platforms, and Microsoft have allocated more than US$650 billion in spending this year, though warnings about overcapacity and concerns over how to monetize the technology persist. Constructing AI data centers can cost tens of billions of dollars and requires coordination with power generators, grid operators, suppliers, and lenders. Oracle and OpenAI have abandoned plans to expand a flagship AI data center in Texas due to prolonged financing negotiations and shifts in OpenAI’s requirements.